Real estate has not slowed down in the face of a global pandemic. Historically-low interest rates have buyers ready to invest in property throughout Texas and the United States. Down payment assistance programs are helping buyers in Dallas, TX, and beyond.

Supreme Lending has been serving Texas property owners for more than twenty years. As a premier mortgage lender, we work quickly and with integrity to help you purchase or refinance a home. And we have extensive experience with down payment assistance options to make your real estate dreams even more accessible. Reach out today to get started.

A Quick Lending Refresher

Unless you can pay cash to purchase a property, you will need to secure a mortgage loan from a lender. The vast majority of buyers carry a mortgage on the property, typically for a term of 30 years.

To get a traditional home loan, you typically need to have 20% of the sale price as a down payment. So, if you want to buy a $300,000 home in Dallas, TX, you would need $60,000 in cash.

The purpose of requiring such a large down payment is to ensure that the buyer has some skin in the game, so to speak. That is, lenders know that homeowners who make a large down payment are less likely to default on the loan.

Having at least 20% equity in the home allows you to avoid paying PMI (private mortgage insurance). PMI protects the lender if you cannot make your payments, and it is standard when a down payment is less than 20%.

Down Payment Assistance Programs

For many hopeful home buyers, the down payment is what holds them back. Frequently, a monthly mortgage payment is similar to what they pay in rent. But accessing the cash for a standard down payment is too difficult.

Fortunately, there are many programs to help buyers secure a loan without needing so much cash upfront. Down payment assistance in Dallas and beyond is allowing thousands of Americans to become homeowners.

Here are some of the top programs that can help you see your real estate dream become a reality.

Homes for Texas Heroes Program

Eligible professions can receive down payment assistance in Texas through this outstanding program. Borrowers receive help in the form of a grant or forgivable second loan. And unlike many down payment programs, you do not have to be a first-time buyer.

The Homes for Texas Heroes Program applies to those in the following careers:

• Active Military and Veterans
• Police Officers
• EMTs
• Firefighters
• Correctional Officers
• Public School Teachers, Counselors, Librarians, and Nurses

Home Sweet Texas Home Loan Program

This down payment program is similar to the Heroes option but without a specific occupation requirement for eligibility. You can receive up to five percent of your down payment through a grant or second lien loan.

For both the Heroes and Sweet Texas Home assistance programs, there are income parameters to be eligible. Each option also can connect you with a real estate agent if needed.

USDA Home Loans

You don’t have to be buying a cattle ranch to qualify for down payment assistance through a USDA home loan. Offered through the United States Department of Agriculture, this loan option helps buyers with low income.

Although rural properties are what you typically think of for a USDA loan, many suburban homes qualify, too. The USDA issues these home loans through approved lenders and then backs them as a guarantor. That is, the USDA promises the lender to make good on the mortgage if the borrower defaults.

By backing mortgages, the USDA helps lower-income buyers achieve homeownership without needing a down payment. Often, these loans carry a low interest rate, too.

VA Home Loans

The Department of Veterans Affairs seeks to thank service members by helping them meet their homeownership dreams. If you served in the United States military and meet eligibility requirements, this loan might be perfect for you.

A VA home loan offers buyers the chance to purchase a house with no money down and, usually, at a lower interest rate. To begin the process, you must first obtain a Certificate of Eligibility (COE) from the VA.

You also need to find a lender who provides this type of loan. The VA does not originate any home loans. Instead, it backs mortgages through private lenders. Veterans who are researching mortgages in Dallas, Texas, will be happy to know how the VA home loan program can serve them.

FHA Home Loans

FHA mortgages are another type of government-backed home loan. These options also offer down payment assistance by offering down payments as low as 3.5%. Presented by the Federal Housing Administration, these mortgages are excellent for first-time buyers.

Similar to USDA and VA loans, mortgage options through the FHA come through approved private lenders. To qualify for the highest mortgage down payment assistance, borrowers need to have a credit score of at least 620.

A Few Pieces to Remember

Pursuing down payment assistance programs is an excellent way to start your homeownership journey. As you do, keep in mind the following considerations:

• You likely will need to pay PMI as part of your monthly payment until your equity in the home reaches 20%.
• Lenders may have strict credit score requirements for you to qualify for down payment assistance.
• Typically, you need to be at least two years removed from bankruptcy and three years removed from foreclosure. Some programs and lenders may have more stringent rules.
• Delinquency on income taxes or student loans is likely to disqualify you.
• Credit scores matter. Although many of these options can work for those with less-than-stellar credit, higher FICO scores are better.

Supreme Lending Has Your Mortgage Loans in Dallas

If you are eager to start building equity in a home of your own, reach out to the team at Supreme Lending in Dallas, TX. Our experts can help you navigate all the down payment assistance options available to you.

Let’s connect and get you on the road to homeownership.